Questions from General Investment

Q: An 8% convertible bond carries a par value of $1

An 8% convertible bond carries a par value of $1,000 and a conversion ratio of 20. Assume that an investor has $5,000 to invest and that the convertible sells at a price of $1,000 (which includes a 25...

Q: Assume you just paid $1,200 for a convertible bond

Assume you just paid $1,200 for a convertible bond that carries a 7½% coupon and has 15 years to maturity. The bond can be converted into 24 shares of stock, which are now trading at $50 a share. Find...

Q: Find the conversion value of a convertible preferred stock that carries a

Find the conversion value of a convertible preferred stock that carries a conversion ratio of 1.8, given that the market price of the underlying common stock is $40 a share. Would there be any convers...

Q: An investor is in the 28% tax bracket and lives in

An investor is in the 28% tax bracket and lives in a state with no income tax. He is trying to decide which of two bonds to purchase. One is a 7.5% corporate bond that is selling at par. The other is...

Q: Which indexes can you use to compare your investment performance to general

Which indexes can you use to compare your investment performance to general market returns? Briefly explain each of these indexes.

Q: An investor lives in a state with a 3% income tax

An investor lives in a state with a 3% income tax rate. Her federal income tax bracket is 35%. She wants to invest in one of two bonds that are similar in terms of risk (and both bonds currently sell...

Q: Maria Lopez is a wealthy investor who’s looking for a tax shelter

Maria Lopez is a wealthy investor who’s looking for a tax shelter. Maria is in the maximum (35%) federal tax bracket and lives in a state with a very high state income tax. (She pays the maximum of 11...

Q: Sara Nixon is looking for a fixed-income investment. She

Sara Nixon is looking for a fixed-income investment. She is considering two bond issues: a. A Treasury with a yield of 5% b. An in-state municipal bond with a yield of 4% Sara is in the 33% federal ta...

Q: Briefly describe each of the following and note how it is computed

Briefly describe each of the following and note how it is computed and how it is used by technicians: a. Advance-decline lines b. Arms index c. On-balance volume d. Relative strength index e. Moving a...

Q: What is day trading, and why is it risky? How

What is day trading, and why is it risky? How can you avoid problems as an online trader?